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Investing.com - Citizens JMP maintained its market outperform rating and $84.00 price target on Rhythm Pharmaceuticals (NASDAQ:RYTM) on Thursday. According to InvestingPro data, analysts’ targets range from $72 to $94, with 4 analysts recently revising their earnings expectations upward. The stock has demonstrated strong momentum, delivering a 56% return over the past year.
The research firm highlighted bivamelagon, a first-in-class daily oral MC4R agonist that could offer a convenient treatment option for hypothalamic obesity (HO), a rare endocrine disorder affecting approximately 5,000-10,000 patients in the United States with no FDA-approved treatments currently available. The company maintains impressive gross profit margins of nearly 90%, though InvestingPro analysis indicates the company is not expected to be profitable this year.
Rhythm’s setmelanotide is positioned to become the first approved HO drug with regulatory submissions planned for the third quarter of 2025. The drug demonstrated a 20% placebo-adjusted reduction in BMI after 52 weeks in Phase 3 trials, with Citizens projecting 2032 sales of $2.1 billion compared to consensus estimates of $1.3 billion. The company’s current revenue growth of 49% year-over-year suggests strong commercial execution. Get access to 10+ additional exclusive InvestingPro insights and the comprehensive Pro Research Report for deeper analysis of RYTM’s potential.
While setmelanotide is administered as a daily subcutaneous injection with hyperpigmentation as a side effect and patent expiration expected in 2032, bivamelagon offers advantages as an oral medication with no reported hyperpigmentation and patent protection until 2045. Citizens estimates the additional decade of exclusivity could represent approximately $3.8 billion in net present value, significant for a company currently valued at $3.96 billion in market capitalization.
Rhythm is also developing RM-718, a weekly subcutaneous MC4R agonist with patent coverage until 2040, with initial data from hypothalamic obesity patients expected by year-end 2025, providing the company with multiple opportunities to extend its revenue potential.
In other recent news, Rhythm Pharmaceuticals reported its Q1 2025 earnings, revealing a larger-than-expected loss per share and lower-than-anticipated revenue. The company posted a GAAP EPS of -$0.81, missing the consensus estimate of -$0.6734, while revenue reached $37.72 million, falling short of the forecasted $40.7 million. Despite the earnings miss, the company experienced a 45% year-over-year increase in net product revenues, reaching $11.7 million. Stifel analysts raised their price target for Rhythm Pharmaceuticals to $94.00, maintaining a Buy rating, citing confidence in the company’s prospects, particularly with its obesity drug setmelanotide. Jefferies analysts also maintained a Buy rating, with an $80.00 price target, noting potential mergers and acquisitions as a possibility. Citizens JMP analysts reaffirmed a Market Outperform rating, with a price target of $84, highlighting ongoing developments, including the potential value of the next-generation oral MC4R agonist, bivamelagon. Additionally, Rhythm Pharmaceuticals presented new data showing that setmelanotide may effectively reduce body mass index and hunger in patients with hypothalamic obesity, with no new safety concerns observed. The company continues to focus on advancing its pipeline, with significant developments anticipated in the coming quarters.
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